YOUR E-MAIL ALERTS

BAGHDAD, Iraq (CNN) -- Iraq's National Assembly voted unanimously Monday to extend for a week the deadline for negotiators to agree on a draft of the country's new constitution.

The committee drafting the document asked for an extension after it failed to reach a compromise by Monday's deadline after months of talks. The new deadline is August 22.

Without the extension, the government would have dissolved, requiring new elections in December and starting the process again -- a prospect the United States has strongly opposed.

The assembly voted after more than five hours of delay and about a half-hour before the midnight deadline.

U.S. leaders were quick to praise the Iraqi efforts and express confidence in the outcome, with Secretary of State Condoleezza Rice and President Bush making similar comments.

"We are witnessing democracy at work in Iraq," Rice told reporters, saying the Iraqis had made "substantial progress" on difficult issues. Bush issued a statement applauding the "heroic efforts" of the Iraqis as "a tribute to democracy."

U.S. Ambassador to Iraq Zalmay Khalilzad blamed the need for an extension on three days lost to negotiators because of a recent sandstorm.

He congratulated Iraqi leaders on "making a major step forward" and said he had "no doubt" the draft would be completed "in the coming days."

Iraqi officials told CNN that Sunni, Shiite, Kurdish and secular officials had sought during the day to resolve two sticking points in the document.

The issues are federalism -- under which Kurds and Shiites would have more autonomy -- and the role of Islamic law in the new government.

Federalism

Mowaffak al-Rubaie, the country's national security adviser, played down disagreement on the form of government, saying the constitution-writing committee had agreed on a federal system.

"A decentralized system and federal system is the best way forward ... not only for the Shia, not only for the Kurd, but all over Iraq," he said.

"Iraq has suffered a great deal from the strong central government," he said. "Iraq was ruled by a ruthless dictatorship using this central government to deny the communities ... of a very diversified society in Iraq."

Al-Rubaie, a member of the National Assembly, noted that the Kurds in northern Iraq have had a measure of autonomy since 1991 following the Persian Gulf War and said that "any province can join with another" to create a region.

Shiites and Kurds, both of whom were repressed by the regime of dictator Saddam Hussein, have sought autonomous regions during the constitution-writing process.

Sunni Arabs, who constituted the ruling class under Saddam despite being a minority in the country, wanted the issue sidelined until the election of a new government.

Sunnis have been the biggest supporters of the insurgency and mostly boycotted the January elections to choose the assembly. Since then, several Sunnis have been added to the constitutional committee, even though they are not members of the assembly.

Last week, Abdul Aziz al-Hakim, head of an influential Shiite group, the Supreme Council for Islamic Revolution in Iraq, called for an autonomous Shiite region in the south. Shiites make up the majority of the country's population.

Some lawmakers disputed al-Rubaie's optimistic view, particularly Sunnis, who have said any draft that comes to the floor of the assembly does so without their consent.

Even Prime Minister Ibrahim al-Jaafari, a Shiite, has distanced himself from the idea of federalism.

Under the country's transitional law, any one of Iraq's three main ethnic groups could veto the constitution in the ratification referendum, scheduled for October 15, by prevailing in at least three provinces where each has a majority.

Last week, Kurdish official Mahmoud Othman said the committee had reached an agreement on oil revenues that called for the money to be paid to the government and distributed evenly throughout the country based on population and necessity.

But it was unclear where the Sunni Arabs stood on the deal. The issue has been complicated by the fact that the oil industry is prevalent in areas dominated by Shiites and Kurds, and Sunni Arabs are concerned they would be left out.

Islamic law

Al-Rubaie sought to minimize the other issue confronting the committee -- the role of Islam in the legislative process.

He said the committee had agreed on the principle that legislation should not "contradict Islam."

The issue has been raised by Western powers -- and some Iraqis -- that the constitution would support Islam's Sharia law, which imposes severe restrictions, particularly on women.

"The issue of religion has been over-emphasized," al-Rubaie said. "We are not drafting a constitution for America. We are drafting a constitution for Iraq. And the majority of Iraqis are Muslims. And the majority of those are serious, practicing Muslims."

Khalilzad, speaking Sunday on NBC's "Meet the Press," said he had "every expectation" the document would include equal rights for women "and that our efforts and the effort of many women here in Iraq and the international community will ultimately pay off on this score."